NHL lockout: Both sides unafraid of battle of attrition
LANCE HORNBY, QMI Agency
|NHL Commissioner Gary Bettman at a press conference in Toronto on Thursday, August 23, 2012. The labour talks with the Players Association will continue in New York next Tuesday. (Veronica Henri/QMI Agency)
National Hockey League owners won the last lockout, but lost the peace.
Bet on Gary Bettman dotting a few more I's and crossing T's this time when a new collective bargaining agreement is struck.
"The players have done very well under this deal," the commissioner harrumphed this week. "The average salary has gone from $1.45 million to $2.45 million."
And that's at the low end of the scale. After Bettman thought the owners had achieved cost certainty through a hard-fought salary cap in 2005, the last flurry of signings in the dying weeks of this agreement included Zach Parise and Ryan Suter getting a combined $196 million from the Minnesota Wild over the next 13 years. The latest signing was a seven-year, $42-million extension for young gun Taylor Hall when his rookie contract expires in Edmonton.
But the players won¹t forget having the cap rammed down their hatch and how many concessions they made in other key areas back in ¹05. With new point man Donald Fehr, they'll be resistant to anything beyond their offer to slow the rate of salaries.
Here's a look at look at how the two sides have pushed each other to the brink of a third NHL lockout in 18 years:
The Gathering Storm
Problems prior to 2004-05 lockout
- Both sides adopted a militant stance in the years leading up to the work stoppage, which became a heated one-on-one feud between Bettman and then-union boss Bob Goodenow. The latter told his players far in advance to put away some pay cheques for a long dispute, while owners compiled an estimated $300 million US war chest. Neither side was afraid to back down and the inevitable occurred.
- The Levitt Report, commissioned by the league and waved like a red flag to taunt the union, claimed 76% of gross revenue for clubs went to player salaries, while the league lost $273 million in 2002-03 alone. Never mind it was due in part to many teams' wanton spending habits, particularly in the July 2002 UFA period. But Forbes Magazine later reported only half the owners losses were to be believed.
- The players hyped their revenue sharing plan and a 5% rollback in salaries, but the token gestures could not sway owners or curry favour with fans, who saw their soaring salaries as catalysts of the dispute.
- Owners sought a cap and players vehemently opposed losing the free market system.
- Stuck with a free agent system that didn't allow them to bolt until 31, players were pressing for a lower age threshold.
- Lost in the CBA rhetoric was the general consensus that the on-ice product was suffering. The trap-happy NHL was strangling its 50-goal and 100-point stars and giving the upper hand to its sumo-sized goaltenders and mucker-type skaters. That wasn't helping sell the game on TV, especially south of the border.
- Owing to the weak Canadian dollar, there were doubts all six franchises north of the border could survive.
- The post-lockout landscape fans came back, but not everywhere. Up to a third of the teams in the bloated 30-team league are now losing money.
- The NHL still compiled $3.3 billion in revenue, but balked at giving 57% to the players.
- The league wound up with a money pit in the Sonoran Desert as the Phoenix Coyotes teetered towards folding. The league bought that franchise and has also needed to prop up other teams. One report had the league spending close to $9 million the past few years on legal costs, much of that related to the Coyotes mess.
- The cap began in 2005 at a manageable $39 million US, with no player making more than $7.8 million. As this CBA expires, it has now exceeded more than $70 million per team.
- Pleased at first to have achieved their cap, the league found out its own general managers were slick at side-stepping the rules. Teams started tacking on years of contract service that won¹t likely be achieved, in order to lessen the annual cap hit. Lou Lamoriello, one of the most adroit in the business at moving chess pieces to stay under the cap, was eventually trumped trying a sweet deal for Ilya Kovalchuk.
- The new NHL, with a zero tolerance policy on obstruction, was initially judged a more entertaining product, if not a tamer one.
- There are two stubborn negotiators on either side of the table who've been through work stoppages and aren't afraid to wage a battle of attrition. The public isn't as riled up as in 2004 -- at least not yet -- so there's no pressure to settle by Sept. 15.
- The players have seen the writing on the wall, or at least checked the math from the new CBAs in football and basketball. Athletes' share of revenue is decreasing and the they must be creative about holding a 50-50 line or trying other avenues to enhance their package.
- Teams will face a lower cap ceiling, but will have to accommodate any big salaries from the old CBA. Those huge contracts likely won't disappear, but
- owners want to make it easier to wiggle out of them.
- Player safety, on and off the ice, is going to be under scrutiny. Equipment, concussions, mental depression and a host of related issues can no longer be ignored.
Rise of NHL salary cap:
2005-06: $39 million